Villar firm faked titles through 'layering': ex-lawyer

By Aries Rufo,

Posted at Apr 13 2010 01:09 PM | Updated as of Apr 24 2010 09:31 AM

SECOND of 3 parts

MANILA, Philippines – A case involving parcels of land, where a property developed by one of the real estate companies of presidential aspirant Manuel Villar Jr. now stands, is an example of how layering and faked documents were employed to acquire properties.

The land case, which involves contested properties in Cavite, was cited by dismissed lawyer Restituto Mendoza in a complaint he filed before the National Labor Relations Commission (NLRC). He used to be the in-house counsel of Adelfa Properties, one of the real estate properties in the Villar Group.

Related Content:

PART 1: Villar built business empire with deceit, corruption: ex-lawyer

PART 2: Villar firm faked titles through 'layering': ex-lawyer

PART 3: Villar firm’s high-end project sits on land for poor

PROFILE: The man who turned his back on Villar

SIDEBAR: Imus Estate land key to Villar-Ayala deal

SIDEBAR: Villar firms bribe and forge? The case of the undervalued crane

INTERACTIVE GRAPHIC: How Villar company obtained titles to contested land

VILLAR CAMP'S REPLY: Land grabbing allegations mere black propaganda: Villar

Villar has a 20% stake in Adelfa Properties, based on records obtained from the Securities and Exchange Commission in January. His wife, Las Pinas Rep. Cynthia, has another 19% stake. Adelfa Properties has a 24% stake in listed firm Vista Land and Lifescapes, according to a disclosure to the Philippine Stock Exchange.

The labor complaint of Mendoza, which Newsbreak obtained, turned out to be a tell-all testimony on the legal practices of some real estate companies that spawned the much-touted wealth of Villar. (Newsbreak counter-checked Mendoza’s claims in the labor complaint against other documents and interviews. Newsbreak also attended 2 hearings of the labor case at the NLRC.)

This case, Mendoza wrote in his complaint, illustrates the reach of Villar’s and his men’s tentacles of corruption to get their way. “It was in this case where complainant (Mendoza) witnessed the brazen corruption of Senator Villar’s senior officers,” Mendoza said in his complaint.

This is the particular case where he “never felt guiltier,” and was a reason why he turned his back on Villar.

Imus Estate 

The contested land sits on Imus Estate, a 200-hectare friar land, which the government used to own.

The land case that Mendoza mentioned in his complaint involves a 5-hectare property, which is now where Armstrong Subdivision stands. The subdivision is one of the projects developed by Adelfa Properties. It is part of the 18-hectare land within the Imus Estate that is being contested by heirs of 3 families: Cuenca, Pakinggan, and Villanueva.

Records from the Land Management Bureau (LMB) showed that, in 1999, a committee of 5, led by Atty. Benjamin Asido of the legal division, conducted an investigation, which resulted in the awarding of Deeds of Conveyance to the heirs of Benito Cuenca and Urbana Pakinggan. The two families had a compromise agreement.

The Deeds of Conveyance indicate that the subject land is now under the property of private individuals. They stem from friar lands, which are government lands with titles.

In April 2001, Armando Adiao, a representative of the Cuenca heirs, filed a complaint before the LMB asking for investigation on how the land titles ended up being owned by Adelfa Properties. It turned out that the real estate company acquired the titles to the land through the heirs of Catalina Vda. De Villanueva.

The LMB said that based on available records, such as the certificate of sale and decree awarding the land, it was Adiao, representing the Cuenca family, and not the heirs of Villanueva who has ownership of the questioned property. The LMB is responsible for administering, managing and disposing of alienable and government lands not under the jurisdiction of other government agencies.

In its finding, the LMB recommended to the Office of the Solicitor General the filing of proceedings in court to cancel the Villanueva mother title and all other titles emanating from the Adelfa property.

Lawyer Mendoza, who was the in-house counsel of Adelfa Properties at the time, questioned the LMB probe, arguing that the firm was not informed that the subject property is being investigated.

Mendoza would later learn that the case was crucial in the efforts of the Villar group to settle its billions of unpaid obligations at the time. The contested land is one of the properties involved in the deal with another property firm, Ayala Land.


Backed up by what he initially thought were genuine documents, Mendoza defended Adelfa Properties’ position before the LMB. The case was one classic example of layering ownership, which is commonly employed by Villar’s group of companies, to legitimize claims.

(Click here for interactive graphic on How Villar company obtained titles to contested land)

Purportedly, the transfer certificates of titles (TCTs) of Adelfa Properties were derived from the TCT of Household Development Corp. (HDC), also part of the Villar group. HDC’s TCT, in turn, stemmed from the TCT of the heirs of a certain Manuel Villanueva.

On the other hand, the TCTs of Villanueva’s heirs derived its origin from the Villanueva patriarch and one Eugenio Villanueva. The TCTs of these two Villanueva’s for their part have its origin from the TCT on one Catalina Villanueva.

Catalina Villanueva, in turn, acquired the title from the questioned property by virtue of a deed of conveyance issued based on sales certificate issued by then Director of Lands Jose Dans in 1952.

Yet, in the original LMB probe, not one of the Villanuevas appeared during the hearing.

The 5-man committee also concluded that the Deed of Conveyance allegedly listed in Catalina Villanueva’s name does not exists, including supporting documents like friar lands sale application, investigation reports, report of bidding, sales certificate or letter of transmittal of an alleged deed of conveyance in the Register of Deeds.

“This clearly show that the Deed of Conveyance, if one has been issued, did not pass through the regular process such as filing of an application, investigation of the application between payment of the purchase price and issuance of a sales certificate and deed of conveyance, “the report stated.

Setting aside the initial findings of the 5-man LMB committee, the LMB ordered a reinvestigation. However, this time, a surveyor was tasked to conduct the probe.

In the exchange of motion and manifestations before the LMB, Adiao argued that the deed of conveyance of Catalina Villanueva was invalid.

Granting that the Villanueva title was invalid, Mendoza argued, “the fact that it has undergone several transfers to innocent purchasers has validated and consolidated the title.”

He cited a Court of Appeals ruling in 1998 where it upheld the validity of transaction of innocent purchasers who relied on the correctness of certificate of titles issued to them.

“Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued and the law will in no way oblige him to go behind the certificate to determine the condition of the property,” the CA ruling said.

Fictitious documents

SIDEBAR: Imus Estate land key to Villar-Ayala deal

MANILA, Philippines - The parcel of land in Imus Estate was crucial to Adelfa Properties and to the entire Villar Group since this was part of what was then a pending financial transaction with another property company, Ayala Land.

At that time, Villar’s real estate companies were burdened with heavy debts as a repercussion of the 1997 Asian financial crisis. Villar’s companies, including the former flagship company, Camella & Palmera Homes could not pay debts that peaked at P12.28 billion in 2001.

Villar’s companies resorted to payment-in-kind arrangement, or dacion en pago in industry parlance. They were using real estate assets to pay for the mounting obligations. READ MORE

While the legal defense was being prepared, one of Villar’s senior officers, engineer Mommar Santos, “wasted no time in talking to LMB officials on how Adelfa could secure the reversal of their previous decision in favor of Adiao,” Mendoza explained in his complaint filed at the labor department.

Santos is a known fixture and fixer at LMB, according to LMB officials interviewed by Newsbreak who requested for anonymity for fear of losing their jobs. Two of the LMB officials told Newsbreak that Santos tried to offer them bribes in relation to the Imus Estate land case.

Mendoza said he was instructed by Santos to file motion for reinvestigation. Mendoza obeyed, submitting documents provided by Santos, such as sales certificate, letter authorizing registration and letter from the Director of Lands to support Adelfa Properties’ claims.

At that time, Mendoza said he was “amazed at the resourcefulness of Mommar (Santos) because in a short time, he was able to secure the documentary evidence.”

He would later find out that the documents were fictitious, “as would be later on admitted to him by Mommar.”

In contrast with Adelfa Properties, which provided original documents, Mendoza pointed out that Adiao could not produce original documents to back up his claim.

In his labor complaint, Mendoza said (Mommar) Santos would later admit to him that the Adelfa Properties documents were all falsified with the help of LMB officials.

“The falsified sales certificate indicates the applicant-awardee as Villanueva and used dates prior to the ones existing in favor of Adiao. Worse, complainant (Mendoza) was also told that the existing documents initially found in the name of Adiao were pulled off from the records to make it appear that only the falsified records were existing,” Mendoza narrated.

The surveyor’s findings went in Villar’s favor.

P7 million settlement

LMB officials that Newsbreak interviewed could only shake their heads that a surveyor’s finding in favor of the Villar group on the Imus friar land estate could overturn that of a 5-man committee composed of lawyers.

They heard money exchange hands, but could not corroborate it with other evidence or testimony.

In documents supporting his labor complaint, Mendoza noted that concerned LMB officials received money for a favorable ruling. “Here, I witnessed the brazen power of corruption when Mommar (Santos), the senior engineer handling the case with me, immediately met with the officers at LMB, including the hearing officer to devise a way to counter the previous ruling. Upon the advise of the LMB officials, the company presented falsified mother titles, sales certificate and other documents that would establish that the title of Villanueva is validly issued when in truth it was not,” Mendoza wrote in his labor complaint.

Mendoza said he would also find out that Adiao’s heirs were paid P7 million in bribe money as settlement for the Imus Estate case. The settlement money was a drop in the bucket as it salvaged what could have been a P300 million reinstated debt of Villar to Ayala Land, Mendoza said.

It was at this point that Mendoza said he struggled internally, whether he was winning his cases or through “lakad,” or under the table negotiation.

Eventually, he had a falling out with his superiors, then he was dismissed. - - With reports and additional research from Ma. Althea Teves and Purple Romero,